New research from the Bank for International Settlements suggests banks have a deposit-pricing tool that may slow stablecoin growth. A working paper by Rashad Ahmed and Iñaki Aldasoro looked at weekly data from January 2019 to June 2025 and controlled for bitcoin prices, Treasury yields and broader financial conditions.
What the paper found
The authors found that a one-week, one basis point rise in average bank deposit rates predicted slower stablecoin growth. That is a tiny move, just 0.01 percentage points. Even so, it was linked to average ten-week growth in stablecoin market capitalization falling from about 15% to about 12%.
Under the authors’ preferred estimate, which adjusts for banks raising rates in response to stablecoin growth, the effect was about three times larger. Growth slowed to roughly 6%. The authors did flag some weakness in that method. In both cases, stablecoin growth slowed but did not reverse.
USDC showed a stronger response
The relationship was stronger for Circle’s USDC than for Tether’s USDT. The authors said that pattern fits USDC’s closer ties to U.S. users. That does not prove causation for every market condition, but it adds a useful data point to a debate that has drawn warnings from bank executives.
Bank of America CEO Brian Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and related products that offer returns. That could reduce lending capacity and raise borrowing costs, he said. The BIS paper does not establish actual losses of bank deposits or lending. Its sample covers one high-rate episode, and the findings may change as yield-bearing stablecoins and tokenized money market funds gain ground.
The funding question for banks
Part of the effect depends on where issuers put reserves. A December Federal Reserve staff analysis explained that money placed in stablecoins can return to banks as issuer deposits. That changes who supplies banks’ funding even when total deposits stay the same. Larger, uninsured balances could require banks to hold more liquid assets and leave less room for long-term loans.
Paying more to keep customers also raises banks’ funding costs. The Fed analysis suggested banks could target better rates at customers most likely to switch, while keeping lower rates for less mobile depositors. The BIS authors wrote that banks retain some influence over the pace of stablecoin adoption through deposit pricing. The practical takeaway is modest: rate policy may shape the speed of the shift, not stop it outright.
